Indian start-ups, BFSI and public sector have adopted blockchain technology. Blockchain has been used for maintaining citizen health record and land registry. Blockchain technology is at its nascent stage in India. It is expected to grow in coming years. ICICI has used it in trade finance process. It could be used in insurance claims and settlement. Health care sector uses it to monitor patient records and drug supply chain to fight counterfeits. AP, Telangana and Karnataka have been the three leading states in implementing blockchain for maintaining land registry, farm insurance and digital certificates through partnerships with leading service providers, start ups and academic institutions.
IBM has entered the world of blockchain, with World Wire — a new global payments network to support payments and foreign exchange for banks and NBFCs. It revolutionizes the way money moves. It is re-invention of the payment systems. The current payment systems do not communicate with each other and are not inter-operable. The new blockchain based IBM network is open and does not differentiate between the currencies. It provides real time settlements. It integrates payments messaging, clearing and settlement on a single unified network. It is a blockchain network. Participants can choose dynamically from a variety of digital assets.
World Wire optimises and accelerates —
o foreign exchange
o cross-border payments and
o remittances
It enables payments locations in 72 countries with 47 currencies and 44 banking endpoints.
The global financial infrastructure is status quo for the last 50 years. There is fear of change. Change is slowly creeping in. IBM is working with regulators.
Some banks have signed letters of intent to issue their own stable coins on World Wire. The network supports settlements using Stellar Lumens and a US dollar stable coin. Several banks and World Wire itself use Stellar protocol that makes money transfer point-to-point. As against this, there are complexities in the conventional correspondent banking.
World Wire reduces intermediaries. It reduces settlement time. It is in seconds since monetary value is transmitted in the form of digital assets (commonly known as cryptocurrencies or stable coins). Efficiency is improved. There is better liquidity management. It steamlines payment reconciliation. Overall transactional costs are reduced.